LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 75th Regular Session May 30, 1997 TO: Honorable Bob Bullock IN RE: Senate Bill No. 1539, As Passed 2nd House Lieutenant Governor West Senate Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on SB1539 ( Relating to the regulation of certain facilities, homes, and agencies that provide child care and of child-care administrators; providing penalties.) this office has detemined the following: Biennial Net Impact to General Revenue Funds by SB1539-As Passed 2nd House Implementing the provisions of the bill would result in a net positive impact of $1,056,302 to General Revenue Related Funds through the biennium ending August 31, 1999. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill. Fiscal Analysis The bill would require the Department of Protective and Regulatory Services (PRS) to establish a mandatory listing program for small family homes that provide regular child-care for compensation in the caretaker's own residence. It would also require PRS to charge each small family home a $20 annual listing fee. The bill would require PRS to conduct background and criminal history checks on certain individuals associated with regulated child-care facilities and family homes. The checks would be required at application and at least once every 24 months after licensure, listing, or registration. Each check would include a search of child abuse and neglect reports maintained by PRS, and a search of criminal history record information made available by the Department of Public Safety or another criminal justice agency. Child-care providers would be required to pay a background and criminal history check fee that does not exceed the department's administrative costs. The effective date for the bill would be September 1, 1997. Methodolgy It is assumed that implementation of the provision requiring small family homes to list with the department would cause the number of regulated family homes to rise by 1,250 in 1998 and 1,250 in 1999. It is also assumed that the number of listed family homes would remain constant in the year 2000 and beyond. The $20 annual listing fee would result in a gain of $25,000 in fiscal year 1998 and $50,000 each year thereafter for the General Revenue Fund. PRS reports that it conducted nearly 48,000 background and criminal history checks on individuals associated with regulated child-care facilities and family homes in fiscal year 1996. These checks were conducted at no cost to the facility or home. It is assumed that implementation of the provision requiring facilities and homes to pay a background and criminal history check fee would generate new revenue with no additional costs. It is assumed that implementation of the provision requiring PRS to conduct background and criminal history checks at least once every 24 months would increase the department's workload by more than 70,000 checks per year. PRS would need additional FTE positions to accommodate the new workload. First year costs and revenues have been reduced by 25% to give the department time to adopt rules and phase-in the new program. It is assumed that PRS would charge a fee to recover the administrative costs associated with the background and criminal history check requirement. These would include staffing costs, a $1 fee for DPS criminal history searches, and a $24 fee for FBI fingerprint searches (which would be conducted on a very small number of individuals). The probable fiscal implications of implementing the provisions of the bill during each of the first five years following passage is estimated as follows: Five Year Impact: Fiscal Year Probable Probable Revenue Change in Number Savings/(Cost) Gain/(Loss) from of State from General General Revenue Employees from Revenue Fund Fund FY 1997 0001 0001 1998 ($768,628) $1,284,279 17.2 1998 (918,892) 1,459,543 22.7 2000 (887,240) 1,427,891 22.7 2001 (887,240) 1,427,891 22.7 2002 (872,368) 1,413,019 22.4 Net Impact on General Revenue Related Funds: The probable fiscal implication to General Revenue related funds during each of the first five years is estimated as follows: Fiscal Year Probable Net Postive/(Negative) General Revenue Related Funds Funds 1998 $515,651 1999 540,651 2000 540,651 2001 540,651 2002 540,651 Similar annual fiscal implications would continue as long as the provisions of the bill are in effect. No fiscal implication to units of local government is anticipated. Source: Agencies: 530 Department of Protective and Regulatory Services LBB Staff: JK ,BB ,NM